Typically, dollar sentiment would be inversely correlated to risk optimism but that's not quite the story so far today. While markets are breathing a sigh of relief as the banking turmoil ebbs, the dollar is also gaining some ground alongside higher bond yields on the day.
USD/JPY in particular is up over 100 pips to near 132.00 but I would say that perhaps owes to some catch up to higher yields after the pair did track lower in trading yesterday instead:
I don't see any major reasons for that but perhaps there were some heavy flows in Asia yesterday that might have come from the Japan fiscal year-end repatriation. Either way, we are seeing price action adjust accordingly at the moment.
Elsewhere, EUR/USD is down slightly by 0.1% to 1.0830 currently but sitting within a roughly 30 pips range on the day. GBP/USD is also lower by around 0.1% to 1.2325 after a slight two-day advance to start the week.
The antipodeans are among the laggards though surprisingly, with AUD/USD down 0.5% to 0.6675 and NZD/USD down 0.3% to 0.6235 at the moment. That comes despite more positive risk sentiment reflected in the equities space to start European trading.
